The short-run aggregate supply (SRAS) curve represents the relationship between
A) the price level and the real Gross Domestic Product (GDP) without full adjustment or full information.
B) the price level and the real Gross Domestic Product (GDP) without full adjustment but with full information.
C) the price level and the nominal Gross Domestic Product (GDP).
D) the decisions of producers and the decisions of consumers.

Question

Quizplus · Accepted Answer

The SRAS curve represents the relationship between the price level and the real Gross Domestic Product (GDP) without full adjustment or full information. This means that in the short run, the level of output produced by firms can be influenced by changes in the price level, without all input and output markets adjusting to their long-run equilibrium positions. This can lead to temporary deviations from potential output and fluctuations in the economy.

The Short-Run Aggregate Supply (SRAS) Curve Represents the Relationship Between